We studied the interaction of hematoporphyrin IX (HpIX) with bilayers of 1-palmitoyl-2-oleoyl-sn-glycero-3-phosphocholine (POPC) containing cholesterol at a molar fraction between 0 and 0.5. The membrane-associated fraction of HpIX decreases significantly over a period of hours, for porphyrin concentrations in the aqueous phase above 50 nM. This was attributed to self-aggregation of HpIX and was well described by a dimerization process. A model was developed to correct for aggregation and obtain the true partition coefficient which is dependent on the molar fraction of cholesterol with a maximum at 20 mol%. The chemical and physical effects on the lipid bilayer upon irradiation of HpIX were studied for lipid bilayers with POPC:Chol 1:1. Exposure of these bilayers to visible light in the presence of HpIX leads to several cholesterol oxidation products that were identified using GC-MS. A dramatic increase in the membrane leakiness was also observed, even for short irradiation times and small light intensities, as evaluated from the rate of pH equilibration and dithionite permeability. The relevance of these results for the mechanism of photodynamic therapy is discussed.